New programme helps small businesses access alternative finance
The European Commission and KfW, the German development bank, have signed a guarantee agreement worth up to €50 million to improve access to finance for micro, small and medium-sized enterprises (MSMEs) in the Western Balkans through alternative financing channels. The programme focuses on businesses that face the greatest difficulties in obtaining finance. This includes innovative start-ups, women- and youth-led companies, and enterprises led by people in vulnerable situations or exposed to discrimination. A further €2.5 million technical assistance support is also provided.
Broadening access to alternative finance providers
The SAFE - MSME Guarantee platform is supported by the European Fund for Sustainable Development Plus (EFSD+) and implemented through the Western Balkans Investment Framework (WBIF). It aims to complement traditional credit guarantee schemes, which typically work with established banks, by extending support to a wider range of financial intermediaries. These include crowdfunding platforms, microfinance institutions, leasing companies and venture capital funds. By sharing part of the financing risk with these providers, the programme enables them to serve smaller and higher-risk businesses that would otherwise struggle to secure funding.
The objective is to strengthen innovation, inclusion and competitiveness across the MSME ecosystem in the region.
Institutional support
EU Commissioner for Enlargement, Marta Kos, said: “We are increasing our support to startups and entrepreneurs in candidate countries, especially to companies run by women and those facing discrimination. To make sure that as our Union expands, no one is left on the margins.”
EU Commissioner for the Mediterranean Dubravka Šuica highlighted that the programme addresses a key constraint in SME financing by providing guarantees that allow financial institutions to serve clients they would not normally be able to support.
Christiane Laibach, member of the Executive Board of KfW Group noted: “The flexible guarantee approach allows alternative finance providers to share part of the risk and thus play a greater role in improving access to capital for MSMEs in the EU neighbourhood regions. This will tackle bottlenecks to private investment and generate new perspectives for growth.”
This programme further expands the WBIF support offered to private sector development in the Western Balkans.
A full overview of private sector programmes is available on the WBIF website.
The WBIF Private Sector booklet is also available for download:
The European Fund for Sustainable Development Plus (EFSD+) was established in June 2021 to support public and private sustainable investment in EU’s partner countries, and as a key tool of EU’s Global Gateway initiative. EFSD+ makes available grants and guarantees for investment projects through International Financial Institutions (IFIs) and has €39.8 billion in guarantee capacity globally for the period 2021 to 2027.
---
About WBIF and Global Gateway
The Western Balkans Investment Framework (WBIF) contributes directly to Global Gateway, the EU’s strategy to boost smart, clean and secure connections in digital, energy and transport, while strengthening health, education and research systems worldwide. Global Gateway aims to mobilise up to €300 billion worldwide in investments through a Team Europe approach, bringing together the EU, its Member States and financial institutions to leverage investments for a transformational impact.